capital report: july 3, 2018

Auto Care Warns Administration of Job Losses and Rising Costs Due to Auto Tariffs

Last Friday, June 29, the Auto Care Association submitted comments to the U.S. Department of Commerce regarding the Section 232 National Security Investigation of Imports of Automobiles, Including Cars, SUVs, Vans and Light Trucks, and Automotive Parts, urging the Trump administration to consider the severity of unintended consequences should these tariffs go into effect.

The association stated: “The availability of affordable high-quality parts from foreign sources creates thousands of jobs that might be threatened should the Trump administration move forward with a tariff on vehicles and vehicle parts.”

Included in the comments was a recent economic study completed for the Auto Care Association by John Dunham and Associates, which found that a 25 percent tariff on imported auto parts could cause a reduction of 17,800 jobs in the auto manufacturing sector, resulting in $1.4 billion in lost wages. The study further predicts that 6,800 jobs would be lost by vehicle repair shops and an additional 85,200 jobs in the auto care wholesale and retail segment due to lower demand.

The study also found that imposing additional tariffs on auto parts and components would increase their price substantially, making it more difficult for working Americans to afford a new car or the cost of repairing the vehicle they currently own. The study estimates that the cost of car ownership will increase by more than $700 per year per household should the tariffs be imposed.

Trump said over the weekend that he expected this investigation to be wrapped up in three to four weeks. Written comments were due Friday but there is also a public hearing scheduled for July 19-20.

Questions? Contact Aaron Lowe.

Read Auto Care’s comments.

 

Rhode Island Legislature Sends Bill Restricting Aftermarket Parts to Governor

The Rhode Island legislature recently passed legislation (House Bill 8013/Senate Bill 2679) restricting the use of aftermarket parts. The governor now has final say over whether it will become law.

This legislation extends the restriction on the use of aftermarket parts from 30 months to 48 months after initial purchase, expands this restriction from crash parts to include all parts damaged in a collision, and requires that all repairs must be completed using the procedures and recommendations of the vehicle manufacturers.

Rhode Island is already one of five states that has a restriction on the use of aftermarket parts. However, should the governor sign this legislation, the state would have imposed the most restrictive laws impacting the use of aftermarket parts in insurance related repairs. While consumers can request aftermarket parts on repairs, they must do so in writing – a requirement that implies that the use of aftermarket parts are inferior to original equipment parts.

The governor has 10 days to sign, veto or allow the bill to take effect without her signature. Auto Care urges members with operations in the state to contact the governor’s office and urge a veto of this bill. Contact information is below:

Questions? Contact Tom Tucker.

 

Data Privacy Bill Passes California Legislature

Last Thursday, June 28, the California legislature passed and the governor signed Assembly Bill 375 (AB 375), which creates the California Consumer Privacy Act of 2018. Effective Jan. 1, 2020, this legislation provides consumers with various rights with respect to their personal information collected by businesses, specifically the right to access it, the right to delete it, the right to know what information/categories of information are collected, the right to know whether that information is being sold or shared, the right to stop a business from selling that info, and the right to equal service and price.

The law also contains a private right of action for data breaches and gives enforcement and regulatory powers to the state attorney general. Although AB 375 is onerous and opposed by the business community, it is a preferable alternative to a proposed ballot initiative, which would have been incredibly costly and difficult to defeat. Further, AB 375 can be amended in the future by a simple majority vote of the Legislature rather than by another ballot measure should changes to the law become necessary.

AB 375 affects any business with gross annual revenues over $25 million that collects consumers’ personal information. Compliance will consist of new notice and disclosure requirements, privacy policy revisions and limitations on what information can be collected, shared and sold. Although the damages for violations are significantly less than what was included in the ballot initiative, businesses will still be subject to $100-$750 in damages per consumer per incident; to injunctive or declaratory relief; or to any other relief the court deems appropriate. The attorney general will be responsible for enforcement, including determining whether an action can proceed. Businesses will be able to seek guidance from the attorney general on compliance with the bill and the attorney general will solicit feedback and public participation by 2020 to adopt related regulations.

Questions? Contact Tom Tucker.

Read the full legislation.

 

Supreme Court Nixes Union Dues for Nonmembers

The U.S. Supreme Court ruled last week that nonunion public employees do not have to pay collective bargaining fees, stating that such requirements violate the First Amendment. In a 5-4 decision, with the opinion written by Justice Samuel Alito, the court’s conservative majority ruled that forced collection of agency fees “violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.”

The court’s interpretation is that the system must be opt-in, not opt-out, holding  that “neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.”

The case is the result of a challenge to the 1977 decision in Abood v. Detroit Board of Education, which upheld a union’s ability to compel nonunion employees to pay collective bargaining costs, sometimes referred to as “fair share” or “agency” fees, as long as they “are used to finance expenditures by the union for collective bargaining, contract administration and grievance adjustment purposes.” The only stipulation in that decision was that that unions cannot charge nonunion employees for political or other ideological activities. 

In overruling Abood, the court stated that “Abood was poorly reasoned… has led to practical problems and abuse… [and] is inconsistent with other First Amendment cases and [does not] justify the perpetuation of the free speech violations that Abood has countenanced for the past 41 years.”

Read the decision.

 

Supreme Court Closes Internet Sales Tax Loophole

In a victory for brick-and-mortar businesses, the U.S. Supreme Court ruled last month that states can require internet retailers to collect sales tax on purchases made online, even if that retailer does not have a physical presence in that particular state. This decision overturned the court’s previous ruling from 1992, Quill Corporation v. North Dakota, which declared that states could not force retailers to collect sales tax if that retailer did not have a substantial connection to that state. This loophole will now go away as companies conducting e-commerce must comply with each state’s tax rules and charge customers the appropriate sales tax at checkout.

The retail community had been working with Congress for years on a legislative solution; however, progress had been slow with members of Congress seemingly split on the issue. The Auto Care Association had supported past efforts to close this loophole and welcomes this decision by the court.

Auto Care was mentioned in Forbes article, which provides further detail on  

Read Auto Care’s statement.

 

Auto Care Releases Prop 65 Toolkit

The Auto Care Association has launched a member-only toolkit available to help auto care businesses navigate California’s Prop 65. The toolkit includes a recent webinar recording and accompanying slide deck, Prop 65 chemical list and Prop 65 FAQs.

Questions? Contact Tom Tucker.

Access the toolkit.

 

Last Chance: Take our Advocacy Survey

What is the most important issue facing the auto care industry? Are you familiar with the association’s policy positions? Do you personally get involved in the political process? Please help the association effectively plan for future public policy discussions by completing our annual Advocacy Survey.

Take survey.

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